Discount Points Calculator
Calculate if buying points to lower your interest rate makes financial sense
Discount Points Calculator
Results Summary
Calculator Disclaimer
This calculator provides estimates based on the information you enter and current market conditions. Actual costs, savings, and break-even periods may vary based on:
- Your credit score and history
- Current market rates
- Lender pricing policies
- Loan program terms
- Length of time in home
- Future rate movements
Please consult with one of our mortgage experts to understand if buying points makes financial sense for your specific situation. The results shown are for informational purposes only and do not constitute a commitment to lend.
Understanding Mortgage Points
What Are Discount Points?
Mortgage discount points are fees you pay directly to the lender at closing in exchange for a reduced interest rate. This is also called "buying down the rate." One point costs 1% of your mortgage amount and typically reduces your interest rate by 0.25%.
Example:
On a $300,000 loan, one point would cost $3,000 and might reduce your rate from 6.5% to 6.25%, potentially saving you money over the life of your loan.
When to Buy Points
- • You plan to keep the loan for a long time
- • You have extra cash available at closing
- • The break-even period aligns with your plans
- • You want to lower your monthly payments
- • Current interest rates are relatively high
Break-Even Point
Calculate how long it will take for the monthly payment savings to exceed the upfront cost of points. If you plan to keep the loan longer than this period, buying points may make financial sense.
Need Help Deciding?
Our mortgage experts can help you determine if buying points is the right choice for your situation.
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